As Roche braces for the biosimilar assault on blockbuster cancer drugs, its Genentech unit is parting ways with 223 staffers in California. In a WARN notice posted on the state’s website, Genentech disclosed that it expects to lay off the employees starting at the end of the month.
A Genentech spokeswoman confirmed the layoffs and said in a statement the “success of our business depends on our ability to respond to change, appropriately allocate resources and manage our operations efficiently.”
After a business evaluation, the company has “made the difficult decision to eliminate some positions,” she added. Layoffs "across different departments" will begin Aug. 31 and wrap up in November. The company said it “greatly appreciates” the employees’ contributions and will support them with financial benefits, extended healthcare coverage and career coaching.
The layoffs follow others late last year at Roche and Genentech. In early November, Genentech said that after a “detailed operational analysis,” it would eliminate 130 positions at a California plant. Then, hours later, Roche laid off 235 employees at a plant in Europe, the result of a switch in drug packaging processes.
The layoffs come as biosimilar competition nears for Roche’s big-selling cancer meds Rituxan, Herceptin and Avastin; together, those meds brought in more than $20 billion last year. Aside from those vulnerable drugs, Roche also faces the loss of its “Cabilly” manufacturing patents in 2019, a loss of hundreds of millions of dollars in annual royalties the company has enjoyed for years.
Roche may have a bit of a reprieve from Rituxan competition, however. As it was bracing for potential competition to the top-seller this year, Novartis’ biosim version ran into a setback at the FDA in May.
With the problems at Novartis, Roche’s megablockbuster may dodge U.S. competition until next year, a Deutsch Bank analyst wrote at the time.
Amid the looming biosim challenges, Roche is rolling on with its “most successful launch” in company history—multiple sclerosis med Ocrevus—as characterized last month by CEO Severin Schwan. In the first six months of 2016, the drug brought in more than $1 billion in global sales.